How to Monetise Services and IoT

Aug 24 • Features, Future of FIeld Service • 623 Views • No Comments on How to Monetise Services and IoT

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Jan Van Veen, Managing Director, moreMomentum, continues his series of articles looking at how service organisations can drive revenue from their services by harnessing the IoT…

Solve bigger customer problems

In the previous issue of Field Service News, I wrote an introduction on the topic “How to Monetise Services and IoT”, covering the dilemma of many business leaders in manufacturing.

In this article, I will elaborate on the first of the three critical steps which often make the difference between success and failure:

  • SOLVE BIGGER CUSTOMER PROBLEMS
  • Articulate the value
  • Build internal momentum for monetisation

Common mistakes in the industry

One of the common mistakes is focusing on the smaller problems and making only small incremental improvements to services or solutions.

One of the common mistakes is focusing on the smaller problems and making only small incremental improvements to services or solutions.

These are typically the standard next step improvements most competitors bring to the market as well. Although these are also necessary improvements – adding features to your solutions – to sustain your market position, they are unlikely to bring about significant growth or opportunities required to monetise. For example, think of new features that car manufacturers introduce to their new models or weekly computer software updates that occur without paying more.

Another common mistake is focusing too much on only the availability and use of the equipment. In most situations, the extra value is having a broader impact of the value creation process for our clients. In most industries, the purchase, financing, and maintenance of equipment is a small portion of the overall budget.

Truck manufacturers as an example

As an example, while the sale of trucks was shrinking dramatically, leading truck manufacturers like MAN, DAF and Scania discovered that discounting the trucks did not have that much of an impact. One of the biggest challenges for truck operators was reducing fuel consumption. The leading truck manufacturers took this challenge beyond aero-dynamics and engine efficiency, and developed data-driven services to reduce fuel consumption by improving the way truck drivers drove the trucks.

Discovering the bigger customer problems

The ideal practice is to:

  • Solve the bigger problems in a significantly better or more efficient way for clients, or
  • Solve any new significant problems for our clients

Before developing new services and solutions, it is crucial to have a deeper understanding of the challenges and problems that your clients face. The following activities will prevent any bias from long-standing experience and business norms:

  • Reframe addressable customer needs with your team and colleagues who are involved. The aim is to have a broader view and scope on customer needs. Explicitly ban objections against the idea of servicing those needs.
  • Focus on actual “jobs-to-do” for your clients and areas where they are struggling or could improve. For example, improving uptime may not be that relevant for clients with a low utilisation rate. Whether you carry out professional customer research or not, it is always good if various colleagues have frequent open conversations with different stakeholders about views on the industry, trends, challenges etc. Sharing the following simple diagram during such conversations is helpful for you and your clients to keep the dialogue open.
  • Explore how your clients are solving problems and what suppliers are helping them.
  • Also, explore the needs and challenges of the customers of your customers. This will give more insight into your customer’s needs.
  • Explore what needs you could/should be addressed now and in the future. With these insights, you can extend and enhance your vision, strategies and roadmap for innovating your services and generating new revenue streams.

The Benefit

Manufacturers that solve the bigger problems can better articulate the value for customers and staff, have higher momentum for change and monetisation, generate new revenue streams and differentiate themselves more from the competition.

Manufacturers that solve the bigger problems can better articulate the value for customers and staff, have higher momentum for change and monetisation

They perform better and have more resources to keep innovating their business, enabling growth in a sometimes disruptive world.

Monetisation of services and IoT – Impulse Session

If you want to accelerate the monetisation of your (new) services and IoT, join our upcoming Impulse Sessions on “How to Monetise Service and IoT”. These are full-day interactive meetings with like-minded peers during which we will exchange our experiences, insights, and challenges.

Book your seat @ http://fs-ne.ws/1pMC30lpssC

Essence

Great offerings and solutions won’t sell themselves!

It is various colleagues together that drive the value perception and sell the solutions, because of their eagerness and passion to perform, learn, develop and make new things happen, as well as avoid unnecessary obstacles that cause internal conflicts of interest and reduce confidence.

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